A newly founded business, typically designed to scale quickly by solving a problem with an innovative product, service, or business model—often in tech or high-growth industries.
What is a Startup?
A startup is more than just a new business—it’s a company in its early stages of development that is designed to grow rapidly by offering a scalable and often innovative solution to a specific problem. While startups can exist in any industry, the term is most commonly associated with tech-driven ventures, digital platforms, and disruptive business models that seek to challenge the status quo.
Unlike small businesses that often focus on profitability and sustainability from day one, startups tend to prioritize growth, market capture, and product development, often operating at a loss initially. The goal is usually to iterate quickly, find a product-market fit, and then scale—sometimes through venture capital or other forms of equity financing.
Startups are typically founded by one or more entrepreneurs and may begin with minimal capital, operating as a lean team or even a single person. Over time, as they gain traction, they may raise funding through angel investors, venture capitalists, or SAFE/convertible note agreements, hire employees, and formalize their operations.
One key trait of startups is that they often operate under uncertainty—testing hypotheses, adjusting their business model, and experimenting with pricing, market fit, and distribution channels. This experimental nature distinguishes startups from traditional businesses, which usually follow more proven and predictable paths.
In legal and operational terms, most startups in the U.S. are structured as C Corporations (especially Delaware C-Corps) to attract investment and issue equity. Others may begin as LLCs for simplicity and flexibility. Founders often create cap tables, stock option pools, and shareholder agreements early in the process to prepare for future funding rounds.
In short, a startup is a high-potential, early-stage company focused on innovation and scalability. It’s not just about being new—it’s about being built to grow.
